- 2020 outlook withdrawn due to ongoing uncertainty regarding market development
- Preliminary results for first quarter: consolidated sales of around €9.4 to €9.8 billion; adjusted EBIT margin of around 2 to 3 percent
- More than 40 percent of production locations worldwide have temporarily ceased activities
- CEO Dr. Elmar Degenhart: “We are safeguarding liquidity by cutting costs substantially and thus maintaining our ability to function effectively”
- About 30,000 employees registered for short-time work in Germany as at April 1, 2020
- Solidarity with workforce: Executive Board and executives worldwide forego 10 percent of their salary in April
Continental is withdrawing its outlook for the current fiscal year due to the uncertainty regarding the duration of restrictions caused by the coronavirus pandemic and the related possible consequences for production, the supply chain and demand. As announced by the company today in a mandatory disclosure, the timing for a new outlook for 2020 currently cannot be determined since the situation remains very dynamic. Previously, Continental had anticipated consolidated sales for the current year of around €42.5 to €44.5 billion and an adjusted EBIT margin of around 5.5 to 6.5 percent.
At the same time, the technology company published its preliminary business figures for the first quarter. Based on these figures, Continental expects to achieve in the first three months of the year consolidated sales of around €9.4 to €9.8 billion and an adjusted EBIT margin of around 2 to 3 percent. In the Automotive Technologies group sector together with the former Powertrain division, sales of around €5.7 to €5.9 billion and an adjusted EBIT margin of around 0 percent are expected. In the Rubber Technologies group sector, sales of around €3.7 to €3.9 billion and an adjusted EBIT margin of around 7 to 8 percent are expected.
“In periods of crisis, financial liquidity is of top priority. To this end, we are cutting our costs, optimizing our working capital and postponing projects and investments that are not urgently required until further notice. We are, however, continuing to push ahead at full steam with key development projects as well as preparations for upcoming production start-ups. In this way, we are maintaining our ability to function effectively and confidently,” said CEO Dr. Elmar Degenhart. At present, more than 40 percent of Continental’s 249 production locations worldwide have temporarily ceased activities for a few days to several weeks in order to protect employees and in response to the drop in demand.
The consequences are reflected in reduced working hours. In Germany alone, about 30,000 employees and thus half of the current workforce have been registered for short-time work as at April 1, 2020. This affects all corporate functions – from production and research and development through to administration, including employees at Continental’s headquarters in Hanover. Certain business units already started reducing working hours in mid-March 2020.